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LawBiz® TIPS – Week of May 26, 2015

LawBiz(r) newsletter

This past weekend was a holiday ... and a time to reflect on those young people who suffer so much by taking up arms to serve and protect us. The economic and social mores in the Middle East have been in turmoil for hundreds of years. Can we be astounded, then, when we hear that for some, on this week-end, 150 years after the Civil War, the Confederate Flag is still a lightning rod of controversy. And, why is it that no one yet reflects on Rodney King's question, "Why can't we all just get along?"

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Putting Yourself Last...

In the business of law, you need to put your personal self last—or, at least, you need to put your business first. In order to have a successful business, you need cash flow, and thus you must prioritize expenses to achieve this.

First come the needs of the practice. This is first because without the practice, there is no source for personal needs.

Second are the lawyer's personal needs as reflected by the draw or salary—that is, all of the expenses required by you and your family to maintain your style of living. This expense should be the most flexible: if the practice produces sufficient income, then you can increase your standard of living. But the better approach is to avoid committing yourself to extensive obligations from which you cannot retrench in time of need.

The next expense in the hierarchy of expenses is savings for the "valleys" of the practice. During each month, some funds should be set aside to carry the practice through leaner times. These valleys are typically temporary interruptions of revenues caused by either a transitory shortage of funds from clients or a temporary lull in their legal requirements that shows up as an unsteady flow of funds to the lawyer.

Personal savings for unexpected emergencies or for retirement are important, too. Too few of us are independently wealthy or maintain a second business activity that will provide ready funds for unanticipated uses down the road. Therefore, the best approach is to set aside a small sum each month and forget about it.

And last, but not least, is the "gravy." After setting aside funds for each of the above categories, the balance should be considered a bonus. This is the money to reward yourself with a trip, a purchase of something special for you or the business, a speculative investment, a charitable contribution, etc.


Putting Yourself Last...

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"Ed educated me on how to implement a plan for the management of my law offices, which I have set up in Santa Monica. With his help, I was able to conceive and put into effect a business plan which promises not only to simplify my business, but to make it more profitable as well. He readily pinpointed my needs and offered sage advice on what I could do to rectify the problems that I have been facing. For this, I am forever grateful and will highly recommend him to anyone who asks."

Santa Monica, CA

"I decided to "go solo" and start my own practice after being a senior associate at a large national law firm. I started in temporary office space with a secretary and one associate attorney. I retained Ed Poll to provide comprehensive consulting and guidance in establishing my permanent office. He knew from day one how to re-shape my thinking from being a day-to-day lawyer into being in charge of a business. Ed knew the right questions to make me answer. Ed has taught me virtually everything I know about formation, planning, and now management of a successful law firm. I would enthusiastically recommend Ed Poll for retention as a consultant in connection with any aspect of law practice management."

Los Angeles, CA


Ed Poll, LawBiz® Management   |   |   |   |


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